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Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing Plants For UAW-General Motors Center for Human Resources Kristin Dziczek Debbie Maranger Menk Yen Chen 3005 Boardwalk, Suite 200 Ann Arbor, Michigan 48108 February 2014

Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

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Page 1: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

Economic Contribution of General Motors’ Orion Assembly, Pontiac

Metal Stamping, and Spring Hill Assembly Manufacturing Plants

For UAW-General Motors Center for Human Resources

Kristin Dziczek

Debbie Maranger Menk

Yen Chen

3005 Boardwalk, Suite 200

Ann Arbor, Michigan 48108

February 2014

Page 2: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing
Page 3: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

i

Contents List of Figures and Tables .............................................................................................................................. ii

Executive Summary ....................................................................................................................................... 1

Background ................................................................................................................................................... 2

Orion Assembly and Pontiac Metal Center—Back On-Line in 2011 ..................................................... 2

Spring Hill Assembly—Back On-Line in 2012 ........................................................................................ 3

Janesville Assembly Remains on Stand-By ............................................................................................ 3

GM’s U.S. Sales and Market Share ........................................................................................................ 3

GM’s North American Capacity and Production ................................................................................... 5

Methodology ................................................................................................................................................. 6

Results ........................................................................................................................................................... 7

Conclusion ..................................................................................................................................................... 8

Appendix ....................................................................................................................................................... 9

References .................................................................................................................................................. 11

Page 4: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

ii

List of Figures and Tables

Figure 1: Location of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly

...................................................................................................................................................................... 2

Figure 2: General Motors’ U.S. Sales and Market Share 2006-2013 ............................................................ 4

Figure 3: General Motors’ U.S. Small Car Sales: Korean-produced Chevrolet Aveo and Chevrolet Spark

and U.S.-produced Chevrolet Sonic, 2004-2013 ........................................................................................... 4

Figure 4: General Motors’ U.S. Chevrolet Equinox Sales: Canadian vs. U.S.-produced Vehicles, 2004-2013

...................................................................................................................................................................... 5

Figure 5: General Motors’ North American Capacity and Production, 2006-2013 ...................................... 5

Table 1: Total Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill

Assembly Manufacturing Operations to the Private Sector Economy in the United States, Including Detail

for Michigan and Tennessee—2013 Estimates............................................................................................. 7

Table 2: Total Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill

Assembly Manufacturing Operations to the Private Sector Economy in the United States, Including Detail

for Michigan and Tennessee—2014 Forecast .............................................................................................. 8

Table 3: Types of Indirect and Spin-Off Jobs Supported by GM’s Orion Assembly, Pontiac Metal Center,

and Spring Hill Assembly Manufacturing Operations, 2013* ....................................................................... 9

Table 4: Types of Indirect and Spin-Off Jobs Supported by GM’s Orion Assembly, Pontiac Metal Center,

and Spring Hill Assembly Manufacturing Operations, 2014 Forecast* ...................................................... 10

Page 5: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 1

Executive Summary This research memorandum examines the economic contribution to the U.S. economy and the Michigan

and Tennessee state economies of General Motors’ decision to reopen three manufacturing facilities—

Orion Assembly (Michigan), Pontiac Metal Center (Michigan), and Spring Hill Assembly (Tennessee) that

had been designated as “stand-by” capacity in the 2009 UAW-GM Agreement. This memorandum is part

one of a two-part analysis of the economic contribution of GM’s facilities in the United States; the

results are preliminary. The second part will look at the broader economic contribution of GM in the

United States and ten U.S. states in which the company manufactures vehicles, parts, and components.

CAR researchers customized a specially constructed regional economic contribution model using

employment and compensation data provided by the company to generate estimates of the economic

contribution of these three plants to the U.S. economy, as well as to the individual states in which the

plants are located. GM restarted three plants—Orion Assembly, Pontiac Metal Center, and Spring Hill

Assembly. The production at Orion Assembly largely replaced GM’s captive imports that were previously

sourced from Korea (small cars), and the production at Spring Hill is replacing imports from Canada

(cross-utility vehicles).

GM reported direct employment at Orion Assembly, Pontiac Metal Center, and Spring Hill Assembly

totaled just over 3,000 in 2013, which CAR estimates supports a total of nearly 38,600 jobs in the U.S.

economy (which includes direct jobs at GM, intermediate jobs at all suppliers to GM, and expenditure-

induced spin-off jobs). For 2013, the analysis yields an employment multiplier of 12.6—meaning that

every GM job supports another 11.6 jobs in the U.S. economy. The forecast for 2014 is an estimated

increase to 3,400 direct jobs at GM, which support a total of almost 39,700 jobs in the U.S. economy and

yields a 2014 employment multiplier of 11.7. GM’s employment at these three manufacturing plants

produced an estimated $3 billion in employee compensation in the U.S. economy in 2013 and 2014. CAR

researchers estimate that GM’s activities at Orion Assembly, Pontiac Metal Center, and Spring Hill

Assembly supported $530 million in transfer payments and social insurance contributions, and $330

million in federal personal income taxes in 2013, and are forecast to support $572 million in transfer

payments and social insurance contributions, and $377 million in federal personal income taxes in 2014.

In Michigan, GM’s 2,561 direct employees at Orion Assembly and Pontiac Metal Center supported a

total of just over 14,000 total jobs in the state in 2013, which yields a state employment multiplier of

5.5. For 2014, the model forecasts GM’s employment at these two manufacturing plants will grow to

2,800, and support just over 14,700 total jobs in the state with a state employment multiplier of 5.3. The

economic contribution of GM’s nearly 500 employees at Spring Hill Assembly to the Tennessee economy

was nearly 2,200 jobs in the state economy, and an employment multiplier of 4.4 for 2013. In 2014, the

model forecasts GM’s Spring Hill Assembly employment will grow to 600, which is estimated to support

just over 2,400 jobs in Tennessee with a 2014 employment multiplier of 4.0. The employment

multipliers are lower in Tennessee because the state has a smaller share of the U.S. automotive supplier

base than does Michigan.

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© Center for Automotive Research 2

Background In the months leading up to GM’S Chapter 11 filing on June 8, 2009, the International Union, UAW

(UAW) and GM reopened their 2007 agreement to revise terms of the agreement and to provide

financial concessions to demonstrate shared sacrifice of all the parties to the bankruptcy case. During

the course of the 2009 “bankruptcy” negotiations, one of the UAW’s concerns was that GM “may have

exited too much capacity in certain segments”1 in their April 2009 Viability Plan that was submitted to

the U.S. Treasury. In an effort to enable GM to respond quickly to an upturn in U.S. demand—and to

avoid increases in GM captive imports to the U.S. market to satisfy that demand—the union and the

company agreed to designate three assembly plants and one stamping plant as “stand-by locations.”

These four “stand-by” plants were to be brought back on-line if U.S. market conditions improved,

creating the need for additional GM productive capacity in the United States. The plants designated as

“stand-by” capacity included Janesville Assembly (Wisconsin), Orion Assembly (Michigan), Spring Hill

Assembly (Tennessee), and Pontiac Metal Center (Michigan).

Figure 1: Location of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly

Source: Center for Automotive Research

Orion Assembly and Pontiac Metal Center—Back On-Line in 2011

The 2009 UAW-GM contract also included a “Memorandum of Understanding” regarding a future

compact/small car investment in the United States2 that would utilize an idled GM-UAW assembly plant

and stamping facility. On June 26, 2009, GM announced that Orion Assembly and Pontiac Metal Center

would be the site for this $575 million small car investment. In addition, there were a number of specific

agreements between the UAW and GM regarding conditions necessary for this investment; most

notably, the union and the company agreed that due to the competitiveness of the small car segment in

the United States, “innovative labor agreement provisions”3 would be required to produce these small

vehicles profitably. The key “innovative” labor provision was the composition of the workforce—with an

eventual goal that the Orion Assembly workforce would be entirely entry level workers, who earn a

1 2009 UAW-GM Modification Agreement, Memorandum of Understanding RE: Imports to the U.S. Market—Stand-

By U.S. Capacity, May 16, 2009. 2 2009 UAW-GM Modification Agreement, Memorandum of Understanding RE: Compact/Small Car Investment in

the U.S., May 16, 2009. 3 Ibid.

Page 7: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 3

starting wage and benefit package that costs roughly half that of the more senior union workers in the

plant. Production at Orion Assembly restarted in the third quarter of 2011, with the Chevrolet Sonic;

production of the Buick Verano began in the fourth quarter of 2011. GM’s small cars had previously

been supplied to the U.S. market as Chevrolet-badged captive imports from Korea.

Spring Hill Assembly—Back On-Line in 2012

On November 21, 2011, GM announced a $61 million investment to restart Spring Hill Assembly as an

ultra-flexible automotive assembly plant capable of building any GM car or cross-utility vehicle (CUV)

that the market demands. An additional $183 million investment was committed to Spring Hill Assembly

for production of a future midsize vehicle. Production at Spring Hill Assembly restarted in third quarter

of 2012 with the Chevrolet Equinox; GM has committed to produce two additional (and as yet,

unnamed) models at the plant. The Equinox had previously been produced only in Canada at GM’s CAMI

Assembly in Ingersoll, Ontario and Oshawa Assembly in Oshawa, Ontario.

Janesville Assembly Remains on Stand-By

Production at Janesville Assembly ended in December 2008. Market demand has not recovered to a

point where GM needs more U.S. manufacturing capacity, and this plant remains on stand-by status.

GM’s U.S. Sales and Market Share

GM’s market share has fallen steadily for decades. The Chapter 11 bankruptcy provided an opportunity

for the company to better align its productive capacity with current and future market demands for GM

cars and trucks. GM shuttered eight vehicle assembly plants between 2006 and 20134, and a number of

these were placed in the assets of Motors Liquidation Company (the former General Motors

Corporation). The Revitalizing Auto Communities Environmental Response (RACER) Trust was created by

the U.S. Bankruptcy Court to remediate, market, and sell these and other former GM properties. Had it

not been for the 2009 agreement between the UAW and GM to place four plants on “stand-by” status,

these facilities could have been closed or relegated to the RACER Trust. The UAW-GM Memorandum of

Understanding to idle these three assembly plants and one stamping facility (but retain ownership)

allowed GM to respond quickly to increased market demand for GM’s small cars and CUVs.

4 The eight plants include Doraville, GA (2008); Lansing Craft Center (2006); Moraine, OH (2008); Oklahoma City,

OK (2006); Oshawa Truck, Oshawa, Ontario, Canada (2009); Pontiac Truck (2009); Shreveport, LA (2012); and Wilmington, DE (2009).

Page 8: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 4

Figure 2: General Motors’ U.S. Sales and Market Share 2006-2013

Source: LMC Automotive

The vehicles produced at Orion Assembly (and supported by stampings produced at Pontiac Metal

Center) are the Chevrolet Sonic and Buick Verano. The Sonic is the smallest car GM has assembled in the

United States since the Chevrolet Chevette was produced in the years 1975-1987. Between 1987 and

2011 (when Sonic production began), GM rebadged and imported small cars from other manufacturers

(Isuzu, Suzuki, and Toyota), as well as producing small Chevrolets in GM’s Korea (formerly Daewoo)

plants for import to the United States. The chart below shows how U.S. sales of the Chevrolet Aveo and

Spark have fallen, while sales of the U.S.-produced Chevrolet Sonic have increased dramatically since the

car’s introduction in the 2012 model year.

Figure 3: General Motors’ U.S. Small Car Sales: Korean-produced Chevrolet Aveo and Chevrolet Spark and U.S.-produced Chevrolet Sonic, 2004-2013

Source: Automotive News Data Center

The vehicle currently produced at Spring Hill Assembly is the Chevrolet Equinox. This vehicle has been

produced for the U.S. market by GM in Canada since 2004. The latest version of the Equinox proved so

popular that in addition to production at GM’s CAMI Assembly in Ingersoll Ontario, GM added co-

production of the models at the underutilized Oshawa Assembly in nearby Oshawa, Ontario in August

2010. Equinox bodies are produced at CAMI, and then transported via truck to Oshawa for paint and

final assembly. In 2012, GM began producing the Equinox at Spring Hill Assembly. The chart below

shows how U.S. sales of the Canadian-built Equinoxes have fallen, while sales of U.S.-produced

Equinoxes have increased.

0%

5%

10%

15%

20%

25%

30%

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

2006 2007 2008 2009 2010 2011 2012 2013

Pe

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nt

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Nu

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Sales Share

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20,000

40,000

60,000

80,000

100,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

U.S

. Sa

les

(Ve

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Aveo/Spark (Imports) Sonic (Domestic)

Page 9: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 5

Figure 4: General Motors’ U.S. Chevrolet Equinox Sales: Canadian vs. U.S.-produced Vehicles, 2004-2013

Source: Automotive News Data Center (2004-2011) and General Motors (2012-2013)

GM’s North American Capacity and Production

As a result of actions taken during GM’s 2009 Chapter 11 bankruptcy, the company’s productive

capacity5 in North America fell from 5.1 million vehicles in 2008 to 3.8 to 3.9 vehicles between 2010 and

2013. Lower capacity coupled with production gains improved GM’s capacity utilization from 63 percent

in 2008 to 77 percent in 2013. A majority of GM’s assembly plants in North America are currently

running two or more shifts to meet production demand. The chart below shows GM’s capacity and

production between 2006 and 2013. While one might expect to see a jump in production capacity in

2011 (when Orion Assembly restarted production) and in 2012 (when Spring Hill Assembly restarted

production), these additions to capacity were offset by other plants that were off-line to retool for new

models during those years.

Figure 5: General Motors’ North American Capacity and Production, 2006-2013

Source: LMC Automotive

5 Two-shift, straight-time capacity.

0

50,000

100,000

150,000

200,000

250,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

U.S

. Sa

les

(Ve

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Canadian-Built Equinox U.S.-Built Equinoxes

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2006 2007 2008 2009 2010 2011 2012 2013

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Capacity Production

Page 10: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 6

Methodology CAR’s utilizes a specially constructed regional economic impact model (REMI6), and customizes the

analysis using proprietary company data on employment and compensation for each region, as well as

publicly available data on investments. The model is used to generate estimates of the economic

contribution associated with GM’s manufacturing operations that were brought back into production

after having been put on stand-by status. The model assumes that production at Orion Assembly,

Pontiac Metal Center, and Spring Hill Assembly primarily replaced GM’s captive imports from Canada

and Korea, as the vehicles put into production in these three plants had previously been produced

outside the United States. The data was coded according to the North American Industry Classification

System.

The REMI model has been fully documented and peer-reviewed, and was designed for the type of

analyses required for this memo. The model has been used by CAR and other organizations for over two

decades. The version of the model used in this analysis represents the economy of the United States, as

well as the states of Michigan and Tennessee. CAR’s approach permitted simulation of the interaction

among the regional economies, as well as with the rest of the nation, providing for an accounting of

interregional trade and migration. The model can simulate economic impacts that occur in any one

region resulting from changing GM’s level of activities in any or all of the regions.

Consideration was paid to the potential of double-counting activities between suppliers and the various

GM assembly plants. Within the framework of the REMI model, there is an inter-industry input-output

table that calculates demand for intermediate inputs used in the production of finished goods. By first

running the simulation for GM’s direct manufacturing operations included in this memo, and then

discounting the calculated demand for parts supplied by GM manufacturing operations, the CAR

research team was able to adjust for systemic double counting, and calculate only the net employment

effects for the three GM manufacturing plants that are the subject of this memo. Since initial efforts

were made to avoid double counting between segments of the industry (automaker and parts supply),

the results for each of these segments can be added together to arrive at the total economic

contribution of GM’s manufacturing operations at Orion Assembly, Pontiac Metal Center, and Spring Hill

Assembly. Employment at Pontiac Metal Center is counted as direct GM employment, but the indirect

employment is adjusted to account for the fact that these jobs are not in vehicle final assembly.

The general analytical methodology is to run baseline simulations for each region’s economy, then

subtract GM activities in each of the regions and run another set of simulations. The difference between

the simulations represents GM’s impact on each region. The results represent the current size of GM’s

three operations—Orion Assembly, Pontiac Metal Center, and Spring Hill Assembly—and the impact of

restarting these plants on the U.S. economy and the economies of Michigan and Tennessee. Impacts are

estimated for calendar 2013, and forecast for calendar 2014.

6 Supplied and constructed specifically for this analysis by Regional Economics Models, Inc. (REMI) of Amherst,

Massachusetts.

Page 11: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 7

Results The analysis shows that GM’s direct employment at Orion Assembly, Pontiac Metal Stamping, and

Spring Hill Assembly of just over 3,000 employees in 2013 supported an estimated 14,000 intermediate

jobs (at facilities that directly supply or service these three GM manufacturing plants), and roughly

21,000 spin-off jobs (jobs that were created by the result of expenditures of GM employees in the

selected plants). The result is a U.S. employment multiplier of 12.6—in other words, every direct GM job

in these three plants supported 11.6 jobs in the rest of the U.S. economy in 2013. GM’s employment at

the three selected plants produced an estimated $3 billion in total compensation in the U.S. economy,

$530 million in government transfer payments and social insurance contributions, and $330 million in

federal personal income taxes paid. The table below details the results for Michigan, Tennessee, and the

balance of the U.S. states. The estimated employment multiplier within Michigan was 5.5—meaning

that every direct GM job in these three plants supported 4.5 jobs in the rest of the Michigan economy in

2013; the employment multiplier for Tennessee is estimated at 4.4—meaning that every direct GM job

in the three selected plants supports 3.4 other jobs in the state of Tennessee. Because there are

suppliers to Orion Assembly and Pontiac Metal Center in Tennessee and suppliers to Spring Hill

Assembly in Michigan, the state economic contributions are derived from production activity in all three

plants. The Tennessee employment multiplier is lower than Michigan’s primarily because a smaller

proportion of Spring Hill’s supply chain is co-located within the state of Tennessee; the automotive

supply base is much more concentrated in Michigan.

Table 1: Total Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing Operations to the Private Sector Economy in the United States, Including Detail for Michigan and Tennessee—2013 Estimates

Economic Impact—2013 Estimates Michigan Tennessee Rest of U.S. All U.S.*

Employment Direct 2,561 498 0 3,059

Intermediate 6,467 730 6,842 14,039

Subtotal (Direct + Intermediate) 9,028 1,228 6,842 17,098

Spin-Off 4,992 939 15,559 21,490

TOTAL (Direct + Intermediate + Spin-Off) 14,020 2,167 22,401 38,588

Multiplier (TOTAL Employment)/Direct Employment 5.5 4.4 N/A 12.6

Compensation ($ Millions, Nominal) 1,022 141 1,552 2,716

Less: Transfer Payments & Social Insurance Contributions

-169 -27 -336 -530

Less: Personal Income Taxes -127 -12 -191 -330

Equals: Private Disposable Personal Income

726 102 1,025 1,856

*Totals may not sum exactly due to rounding errors.

Looking forward to 2014, CAR estimates that GM will employ 3,400 in the three selected manufacturing

plants—an employment gain of roughly 3507. This level of employment is expected to support nearly

14,500 intermediate (supplier) jobs, and close to 22,000 spin-off (expenditure-induced) jobs—leading to

7 The employment forecast is a model output, and was not provided by General Motors.

Page 12: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 8

a total employment impact of almost 40,000 jobs, and an employment multiplier of 11.7. The estimated

multiplier for 2014 is lower than the 2013 estimate of 12.6 largely due to the fact that the REMI model

assumes both a growing economy for all sectors (which means the auto sector shares the burden of

supporting spin-off jobs with other sectors) and productivity improvements (which means the same

number of workers can produce more in terms of both quantity and value; quantity gains will increase

indirect employment as more inputs are required, but not spin-off employment since wages do not

increase at the same rate as do production quantity and value). GM’s employment at the three selected

plants produced an estimated $3 billion in total compensation in the U.S. economy in 2014, and

supports $572 million in government transfer payments and social insurance contributions, and $377

million in federal personal income taxes. The table below includes the detailed forecast for Michigan,

Tennessee, and the rest of the United States. As was the case for the U.S. employment multiplier, the

individual state multipliers are also forecast to be slightly lower in 2014; the forecast for the Michigan

employment multiplier is 5.3, and the forecast for the Tennessee multiplier is estimated at 4.0.

Table 2: Total Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing Operations to the Private Sector Economy in the United States, Including Detail for Michigan and Tennessee—2014 Forecast

Economic Impact—2014 Forecast Michigan Tennessee Rest of U.S. All U.S.*

Employment Direct 2,800 600 0 3,400

Intermediate 6,652 789 7,000 14,441

Subtotal (Direct + Intermediate) 9,452 1,389 7,000 17,841

Spin-Off 5,256 1,036 15,547 21,839

TOTAL (Direct + Intermediate + Spin-Off) 14,708 2,425 22,547 39,680

Multiplier (TOTAL Employment)/Direct Employment 5.3 4.0 N/A 11.7

Compensation ($ Millions, Nominal) 1,108 166 1,695 2,969

Less: Transfer Payments & Social Insurance Contributions

-167 -30 -375 -572

Less: Personal Income Taxes -147 -15 -215 -377

Equals: Private Disposable Personal Income

794 121 1,105 2,020

*Totals may not sum exactly due to rounding errors.

Conclusion The UAW and GM’s agreement to retain three assembly plants and one metal stamping facility on

“stand-by” status to respond quickly to the need for additional capacity or to displace sales of GM’s

captive imports has added roughly 40,000 jobs to the U.S. economy in 2013 and 2014. Restarting

production at GM’s Orion Assembly and Pontiac Metal Center added 14,000-15,000 jobs to the Michigan

economy in 2013 and 2014, and restarting production at GM’s Spring Hill Assembly added 2,200-2,400

jobs to the Tennessee economy in 2013 and 2014.

Page 13: Economic Contribution of General Motors’ Orion Assembly, Pontiac · Economic Contribution of General Motors’ Orion Assembly, Pontiac Metal Stamping, and Spring Hill Assembly Manufacturing

© Center for Automotive Research 9

Appendix The following two tables detail the industry sectors that contribute to the 2013 and 2014 induced

(indirect and spin-off) employment estimates supported by GM’s direct employment at its Orion

Assembly, Pontiac Metal Center, and Spring Hill Assembly plants. The largest contributing sectors to the

U.S., Michigan, and Tennessee induced employment estimates are manufacturing, construction, retail

trade, and wholesale trade; in the rest of the United States, the largest contributing sectors are

manufacturing, professional and technical services, administrative and waste services, and construction.

Table 3: Types of Indirect and Spin-Off Jobs Supported by GM’s Orion Assembly, Pontiac Metal Center, and Spring Hill Assembly Manufacturing Operations, 2013*

Industry Sector Michigan Tennessee Rest of U.S. All U.S.

Forestry, Fishing, Related Activities, and Other 4 2 71 77

Mining 10 3 415 428

Utilities 36 2 86 124

Construction 1,105 174 1,710 2,989

Manufacturing 2,559 330 4,486 7,375

Wholesale Trade 1,457 224 1,194 2,875

Retail Trade 1,297 169 1,485 2,951

Transportation and Warehousing 168 69 1,375 1,612

Information 84 17 486 587

Finance and Insurance 208 46 1,664 1,918

Real Estate and Rental and Leasing 435 48 626 1,109

Professional and Technical Services 572 132 1,874 2,578

Management of Companies and Enterprises 286 10 830 1,125

Administrative and Waste Services 665 99 1,828 2,592

Educational Services 109 12 264 385

Health Care and Social Assistance 1,022 127 1,441 2,590

Arts, Entertainment, and Recreation 175 23 529 727

Accommodation and Food Services 625 75 726 1,426

Other Services, including Public Administration 642 107 1,312 2,061

TOTAL 11,459 1,669 22,401 35,529

*Non GM jobs; totals may not sum exactly due to rounding errors.

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© Center for Automotive Research 10

Table 4: Types of Indirect and Spin-Off Jobs Supported by GM’s Orion Assembly, Pontiac Metal Center, and Spring Hill Assembly Manufacturing Operations, 2014 Forecast*

Michigan Tennessee Rest of U.S. All U.S.

Forestry, Fishing, Related Activities, and Other 3 1 69 73

Mining 10 3 445 458

Utilities 37 2 87 126

Construction 1,276 242 1,878 3,396

Manufacturing 2,568 338 4,595 7,501

Wholesale Trade 1,502 238 1,203 2,943

Retail Trade 1,359 187 1,358 2,904

Transportation and Warehousing 168 72 1,422 1,662

Information 84 17 486 587

Finance and Insurance 198 46 1,638 1,882

Real Estate and Rental and Leasing 460 53 613 1,126

Professional and Technical Services 584 138 1,979 2,701

Management of Companies and Enterprises 285 10 846 1,140

Administrative and Waste Services 679 108 1,899 2,686

Educational Services 124 14 250 388

Health Care and Social Assistance 1,048 134 1,341 2,523

Arts, Entertainment, and Recreation 182 24 520 726

Accommodation and Food Services 698 85 647 1,430

Other Services, including Public Administration 645 112 1,271 2,028

TOTAL 11,910 1,824 22,547 36,280

*Non GM jobs; totals may not sum exactly due to rounding errors.

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© Center for Automotive Research 11

References “2009 UAW-GM Modification Agreement,” May 2009.

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Hill, Kim. “Contribution of Toyota to the Economics of Fourteen States and the United States in 2003.” Center for Automotive Research, June 2005.

Hill, Kim, Adam Cooper, and Debbie Maranger Menk. “Contribution of the Automotive Industry to the Economies of All Fifty States and the United States.” Center for Automotive Research, April 2010.

Hill, Kim, and Debbie Maranger Menk. “Contribution of the Motor Vehicle Supplier Sector to the Economies of the United States and Its 50 States.” Center for Automotive Research, January 2007.

Hill, Kim, and Debbie Maranger Menk. “Contribution of Toyota Motor North America to the Economies of Sixteen States and the United States, 2006.” Center for Automotive Research, October 2007.

Hill, Kim, and Debbie Maranger Menk. “Contribution of Toyota Motor North America to the Economies of Sixteen States and the United States in 2010.” Center for Automotive Research, March 2011.

Hill, Kim, and Debbie Maranger Menk. “Contribution of a Vehicle Infrastructure System to the Economy of Michigan: Economic and Industrial Impacts Update and Benefit-Cost Analysis.” Center for Automotive Research, June 2008.

Hill, Kim, and Debbie Maranger Menk. “The Economic and Environmental Impacts of a Corporate Fleet Vehicle Purchase Program.” Center for Automotive Research, October 2009.

Hill, Kim, Debbie Maranger Menk, and Joshua Cregger. “Assessment of Tax Revenue Generated by the Automotive Sector.” Center for Automotive Research, April 2012.

Hill, Kim, Debbie Maranger Menk, and Joshua Cregger. “Contribution of Urban-Based Suppliers to the Local Economy.” Center for Automotive Research, October 2012.

Hill, Kim, Debbie Maranger Menk, and Joshua Cregger. “Economic Impact of Hyundai in the United States.” Center for Automotive Research, November 2011.

Hill, Kim, Bernard Swiecki, Debbie Maranger Menk, Joshua Cregger, and Michael Schultz. “Economic Contribution of the Ford Motor Company Michigan Assembly Plant to the Michigan Economy.” Center for Automotive Research, March 2013.

Hill, Kim, Richard Wallace, Debbie Maranger Menk, and Joshua Cregger. “Analysis of the Economic Contribution of Constructing the New International Trade Crossing: A New Bridge Linking Detroit and Windsor.” Center for Automotive Research, April 2012.

McAlinden, Sean P., Yen Chen, and Adam Cooper. “CAR Research Memorandum: The Economic and Fiscal Contributions of the “Cash for Clunkers” Program – National and State Effects.” Center for Automotive Research, January 2010.

McAlinden, Sean P., Adam Cooper, and Debbie Maranger Menk. “CAR Research Memorandum: The Impact on the U.S. Economy of Successful versus Unsuccessful Automakers Bankruptcies.” Center for Automotive Research, May 2009.

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McAlinden, Sean P., Kristin Dziczek, and Debbie Maranger Menk. “CAR Research Memorandum: The Impact on the U.S. Economy of a Major Contraction of the Detroit Three Automakers.” Center for Automotive Research, November 2008.

McAlinden, Sean P., Kristin Dziczek, Debbie Maranger Menk, and Joshua Cregger. “CAR Research Memorandum: The Impact on the U.S. Economy of the Successful Automaker Bankruptcies.” Center for Automotive Research, November 2010.

McAlinden, Sean P., George A. Fulton, Donald R. Grimes and Lucie G. Schmidt, and Barbara C. Richardson. “Contribution of the Automotive Industry to the U.S. Economy in 1998: The Nation and Its Fifty States.” University of Michigan, Winter 2001.

McAlinden, Sean P., Kim Hill, David Cole, and Debbie Maranger Menk. “Contribution of Honda to the Economies of Seven States and the United States.” Center for Automotive Research, January 2009.

McAlinden, Kim Hill, and Bernard Swiecki. “Economic Contribution of the Automotive Industry to the U.S. Economy: An Update.” Center for Automotive Research, Fall 2003.

McAlinden, Sean P., and Debbie Maranger Menk. “The Effect on the U.S. Economy of the Successful Restructuring of General Motors.” Center for Automotive Research, December 2013.

McAlinden, Sean P., and Bernard Swiecki. “The Contribution of the International Auto Sector to the U.S. Economy: An Update.” Center for Automotive Research, March 2005.

“Contribution of the U.S. Motor Vehicle Industry to the Economies of the United States, California, New York, and New Jersey in 2003.” Institute of Labor and Industrial Relations, University of Michigan, and the Center for Automotive Research, May 2004.

Note: The research staff of the Center for Automotive Research performed a few of these studies while

employed by the University of Michigan’s Office for the Study of Automotive Transportation.